Tim Cook hints at Apple’s ‘hardware subscription’ for iPhones
In a discussion of the quarterly figures, Apple director Tim Cook hinted that Apple will offer a subscription that includes iPhones. An analyst asked him if such a subscription is on the way.
Cook does not confirm the existence of such a subscription, but says in the discussion of the quarterly figures that Apple will make it easier for customers to pay monthly for iPhones. “If you look at hardware-as-a-service or as a bundle, there are customers who actually see it that way now because they have an upgrade plan. So in a sense that already exists and I think disproportionately more customers who will take subscriptions.”
Apple now has the iPhone Upgrade Program in the US, whereby customers pay off an iPhone in 24 months via a loan construction and can also exchange their iPhone for a new one after a year. That costs between 35 and 69 dollars per month. Analysts have been talking about the possibility that Apple could combine hardware and services in a bundle for some time. For example, in addition to an iPhone, it can contain extra iCloud storage, Apple Care+, Arcade, Music and TV+ for a fixed amount per month.
There is no continuous subscription or a bundling of hardware and services, but Cook does hint at that. “One of the things we’re trying to do is make it easier and easier for people to pay monthly. We’re aware that many users want recurring payments and we’re committed to making that easier than it is now. “
Apple is now offering hardware buyers Apple TV+ free of charge for a year. It would have cost $60 otherwise. That streaming service will start on Friday. Other services such as Arcade are not included in the price. CFO Luca Maestri did not answer a question about how Apple will reflect the discount on TV+ in sales. As tweaker Ronwiel pointed out, it seems that Apple will book part of its revenue from hardware under services. How exactly that will happen, Apple is keeping a secret. “Of course we have to make assumptions about how many people will be using Apple TV+,” said Maestri. “And we don’t want to share any details about that, because those assumptions are confidential and competitive.”
Apple released its most recent results on Wednesday evening. Turnover from hardware is declining, while that from services is rising sharply. Sales from iPhones and Macs were lower than the same period last year, while iPads and the wearables category were higher.